Expert Guide to Investing in Art

Investing in art can be a profitable exercise, says expert Olyvia Kwok. Her involvement with the world of art investment began as a 22-year-old, with the purchase of a Chinese scroll painting for $33,000, which she later sold for $220,000. She opened her first Olyvia Kwok gallery in London in 2005. Since then, she has continued to make a name through her ability to spot emerging markets and trends, sourcing key acquisitions for global collections. She currently runs an art investment business, Willstone Management. Here, Olyvia offers some advice on investing in art, spotting key trends and managing risk.

One attribute that I’ve always been famous for is my ability to understand the art market. I use this aptitude for market analysis and predictions to assist prestigious clients with the enhancement of their art collections.

I know exactly how much influence a respected gallery can have on the value of an artist’s work and recognise when trends are beginning to shift.

Recognising the risk of collecting art

There is always a level of risk associated with investing in art. This is why it’s so essential for collectors to recognise risk and mitigate against it. One of the most important attributes that a successful art dealer should have is the ability to undertake comprehensive due diligence prior to purchase.

When considering the management of risk, collectors should pay attention to diversity of collection, the issue of forgeries and major restoration and the optimum selling time for a piece.

As with other investment opportunities, art as an asset class has some inherent risk attached. This risk can be limited if attention is paid to these areas of mitigation. This attention is  something that every successful art dealer must exhibit.

Accept and utilise advice

As an expert who provides informed advice and data that has been acquired over many years, I know how essential it is for anyone who has ambitions to build a lucrative art collection to be able to accept such advice and utilise it to their advantage.

Almost anyone can attend an auction and bid on a work of art. The skill lies in ensuring that the purchase is a profitable one; that returns on investment are maximised.

The type of information that is available to collectors, from an authority such as myself, turns making a purchase at auction into a precise and informed action that is supported by relevant and up-to-the-minute data.

Art collectors need to have the ability to take this information, understand its implications and use it to enhance their level of success. This often includes the ability to change tastes according to trends and financial implications.

Remaining static is not a wise art investment strategy.

Acting with assurance at an art auction

In addition to using advice to be successful at an art auction, there are other attributes which art collectors need to have, if they want to be successful in the long term.

They need to study the works and artists being featured in order to determine potential profitability, recognise the ceiling at which profitability could potentially be threatened and study patterns at previous auctions.

Assurance at auction comes from an advanced level of knowledge and a high level of experience.

Every art collector needs to make use of all prior experiences to improve their ability to secure advantageous results.

Collectors have to understand the value of advice and research. They need to recognise that purchases are not a “sure thing” and that risk mitigation techniques, such as the completion of due diligence, are vital.

Arguably, most importantly collectors need to understand the vagaries of the market and have the ability to predict trends that are likely to happen. It’s this last trait that has been a defining factor in the success that I have had in the art collecting world, and it can help define the success of every other collector.